New coastal setbacks not expected to prompt increase in insurance rates

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COLUMBIA — Insurance rates would not be expected to rise if the state’s oceanfront building setback line was lengthened, contrary to warnings by opponents of the tighter construction restrictions.

That was the determination of Leslie Jones, deputy director of actuarial and market services for the S.C. Department of Insurance, who Tuesday addressed the Blue Ribbon Committee on Shoreline Management.

Last month the blue ribbon committee voted 6-5 in favor of changing the 20-foot setback line to a 50-foot distance. Those in the majority said it would better protect the state’s public dry sand beaches. Those who voted against the change had worried that private beach house owners could suffer rate hikes in their premiums.

The proposed change would restrict new construction, seawalls and larger hotels and condominium developments.

“Really, location is key. So from an insurance company’s perspective, whether or not you change the setback lines, that’s not going to directly affect premiums,” said Jones.

“But obviously these properties are close to the water, so they’re going to be rated up just based on their location, or coverage is not going to be available.”

Any setback line recommendations from the committee would ultimately go before the S.C. General Assembly.

Some of the committee members who had voted against the longer setback last month, including Rep. Bill Herbkersman, R-Bluffton, were not present Tuesday.

After the meeting, committee chairman Wes Jones, of Hilton Head firm Jones, Simpson and Newton, PA, who had voted in favor of the 50-foot building setback line, predicted the insurance department official’s testimony would carry weight.

But he stressed that a potentially longer setback line would affect areas with more undeveloped coastal real estate, because existing property would be grandfathered in under the current 20-foot line.

Staff for the state’s Ocean and Coastal Resource Management has said public beaches would be better protected by a longer oceanfront setback line, which is the most landward boundary and is measured from the baseline, based on long-term erosion rates. The baseline is crest of the primary oceanfront sand dune.

Hard erosion-control structures are prohibited within the beach-front jurisdictional area, which is seaward of the setback line. But local zoning allows hard erosion control structures, such as seawalls, just outside of the state setback area.

As the shoreline erodes, those structures are laid bare, which exacerbates the erosion. At high tide, that can mean the total loss of the dry sand beach, which reduces the public value and use.

Loss of public, dry sand beach at high tide is evident in portions of Fripp Island, Folly Beach and Debidue Beach.